Price of gasoline could reach $3 per gallon by Christmas
Crude oil prices on the rise again
Typically it’s the start of summer — not winter — when motorists can anticipate a jump in gasoline prices. But this holiday season, drivers should expect to pay more at the pump.
In Lawrence, fuel prices are already 12 percent higher than they were a year ago. On Tuesday, the average for the city was $2.81, about 3 cents higher than the day before and 29 cents higher than a year ago.
Most of the increase has occurred within the past month following a year of stability, said Jim Hanni, executive vice president of public affairs for Kansas AAA.
“This is a little unusual, this kind of run-up,” Hanni said.
Crude oil recently reached $89 a barrel, a price that hasn’t been seen since fall 2008. If the cost of crude oil continues to climb, analysts predict that by Christmas Day motorists across the country could pay more than $3 per gallon.
Scott Zaremba, president of Zarco 66, said it’s too early to say whether gas prices at his four Lawrence stations will go up over the holidays. Prices at his stations haven’t moved in four days.
“Commodity prices don’t seem to be in line with supply and demand,” Zaremba said.
In the past week, Hanni said three events have occurred to contribute to the spike in gas prices.
• After the European Union took steps to stabilize its sovereign debt, the euro strengthened against the U.S. dollar.
• Chinese manufacturing had grown at its fastest rate in seven months, easing concerns about a looming industrial slow down.
• Automatic Data Processing, the country’s biggest payroll processing company, announced that private-sector employment had 93,000 new jobs in November.
Hanni said he would have a better understanding next week of how higher gas prices will affect holiday travel.
So far, Beverly Falley, owner of Lawrence Travel Center, said she hasn’t seen a boost in airline tickets based on higher fuel prices. Instead the increase in plane ticket prices are attributed to fewer seats being available. And John Novotny, manger of Travellers Inc., said prices haven’t increased enough for airlines to tack on fuel surcharges, as they did when gas prices skyrocketed in 2008.